Despite growth slowing in August, spending remains above decade average nationwide
The latest Commonwealth Bank Business Sales Indicator (BSI) revealed that annual sales growth remained above the decade average in August, even while experiencing the slowest monthly growth in about three years.
Overall, economy-wide spending rose by 0.2% in trend terms in August following a growth of 0.4% in July and 0.5% in June. Annual growth of spending eased for the third month to 6.6%, which is still above the decade-average of 5.1%. The seasonally adjusted measure of the BSI fell 1.0% in August (the second fall in six months) while annual growth eased from 7.3% to 5.6%.
Craig James, Chief Economist, CommSec and author of the BSI report, said that despite the mild sales growth recorded in August, the Australian economy is still in good shape and continuing to grow.
“While the initial boost in business spending following the last Federal budget has tapered off, annual growth figures show that economy-wide spending remains above the decade average. Interest rates are low, the job market shows signs of settling and home building is underpinning spending across the economy.
“Additionally, Australian businesses have reasons for optimism given a lower Aussie dollar and budget stimulus measures for the small business sector,” he added.
At an industry level, sectors to experience the strongest growth were Clothing and Miscellaneous Stores, both rising 1.1% in trend terms respectively in August. On the other hand, sectors to experience a dip in sales in trend terms included Airlines (down 4.4%) and Mail Order/Telephone Order providers (down 3.5%).
At a state level, sales rose in all states and territories in August except the Northern Territory (down 0.5%) and Victoria (down 0.1%). Tasmania recorded the highest growth (up 0.8%), followed by South Australia (up 0.7%), Western Australia (up 0.5%), Queensland (up 0.4%) and ACT (up 0.1%), while NSW recorded flat sales.
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